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The Mortgage Bankers Association is seeing signs that the foreclosure crisis is ending. “The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” says Jay Brinkmann, MBA’s chief economist, in a published statement. Brinkmann said that normally there is a large spike in short-term delinquencies at the end of the year because of high heating bills and holiday expenditures. This year, there was not only no spike, but the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent. Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said. “[This] gives us growing confidence that the size of the problem now is about as bad as it will get,” he said. Source: Mortgage Bankers Association of America

The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit. While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common. The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.” For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or interest statements. Source: Washington Post

Despite a slow market and a slight decrease in the resale value of most remodeling projects, Realtors® report that the smartest home improvement investments may also be some of the least expensive. Results from the 2009 Remodeling Cost vs. Value Report show that small-scale exterior projects are the most profitable at resale, according to estimates by Realtors® who completed a recent survey. On a national level, eight out of the top 10 projects in terms of costs recouped were exterior replacement projects that cost less than $14,000. Certain types of door and siding replacements, as well as wood deck additions all returned more than 80 percent of project costs upon resale. A steel entry door replacement, a new addition to this year’s list, recouped 128.9 percent of costs, followed by upscale fiber-cement sliding replacements at 83.6 percent. Wood deck additions recouped 80.6 percent of costs. “Once again, this year’s Remodeling Cost vs. Value Report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. Source: National Association of Realtors.

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Spring is here and the OC market is flying... Overall US home prices climbed 5% in February from a year ago, despite an incoming wave of REOs according to the Clear Capital Home Data Index. Prices grew on a yearly basis for the first two months of 2010. The 5% uptick in February bested the 2.3% yearly increase in January. However, prices remained unchanged on a rolling quarterly basis. “If the increase in demand that preceded the end of the last tax credit is any indication, home prices may dip only slightly into negative territory before getting an added boost before the April tax credit deadline,” said Alex Villacorta, senior statistician at Clear Capital. Prices in Providence, Rhode Island climbed 6.1% from the previous three months, the highest increase of any metropolitan statistical area (MSA). California had five of the 15 highest performing markets as Los Angeles prices gained 2.2% over the rolling quarter. In 11 of the top 15 markets REO saturation increased by an average of 1.3%. “We observed an expected increase in REO saturation this month as the flow of foreclosures continued to come into the market, while traditional non-distressed sales wait to be listed in the spring and summer months,” added Villacorta. The price gains in the early months of 2010 contrast sharply with 2009, when credit lines were cinched, investments dropped in value and financial institutions facing failure dumped REOs onto the market, according to the report. Source: Housing Wire

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Billionaire investor Warren Buffett predicted that the real estate market downturn will end by 2011 as the housing inventory declines. "Within a year or so, residential housing problems should largely be behind us," Buffett wrote in his annual letter to the shareholders of Berkshire Hathaway, where he is chairman and CEO. "Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means." He also pinpointed what he sees as the cause of the downturn. "People thought it was good news a few years back when housing starts, the supply side of the picture, were running about 2 million annually," wrote Buffett, "But household formations, the demand side, only amounted to about 1.2 million." Source: Bloomberg News

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit. Other factors that should spur buyers include low rates. If the Federal Reserve stops buying securities backed by home loans at the end of March, 30-year rates will almost certainly rise to more than 6 percent. Finally, about 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv, but that only helps if you want to live there. Source: Money Magazine